First Quarter 2026 Distributable Net Investment Income(1) of $1.00 Per Share
First Quarter 2026 Distributable Net Investment Income Before Taxes(2) of $1.04 Per Share
Net Asset Value of $33.46 Per Share
HOUSTON, May 7, 2026 /PRNewswire/ -- Main Street Capital Corporation (NYSE:MAIN) ("Main Street") is pleased to announce its financial results for the first quarter ended March 31, 2026. Unless otherwise noted or the context otherwise indicates, the terms "we," "us," "our" and the "Company" refer to Main Street and its consolidated subsidiaries.
First Quarter 2026 Highlights
Net investment income ("NII") of $84.6 million, or $0.93 per share
Distributable net investment income ("DNII")(1) of $90.8 million, or $1.00 per share
DNII before taxes(2) of $94.1 million, or $1.04 per share
Total investment income of $140.1 million
An industry leading position in cost efficiency, with a ratio of total non-interest operating expenses as a percentage of quarterly average total assets ("Operating Expenses to Assets Ratio") of 1.3% on both an annualized basis for the quarter and for the trailing twelve-month ("TTM") period ended March 31, 2026
Net asset value of $33.46 per share as of March 31, 2026, representing an increase of $0.13 per share, or 0.4%, compared to $33.33 per share as of December 31, 2025
Declared regular monthly dividends totaling $0.78 per share for the second quarter of 2026, or $0.26 per share for each of April, May and June 2026, representing a 4.0% increase from the regular monthly dividends paid in the second quarter of 2025
Declared and paid a supplemental dividend of $0.30 per share, resulting in total dividends paid in the first quarter of 2026 of $1.08 per share and representing a 2.9% increase from the total dividends paid in the first quarter of 2025
Completed $205.9 million in total lower middle market ("LMM") portfolio investments, including investments totaling $104.8 million in three new portfolio companies, which after aggregate repayments, return of invested equity capital and a decrease in cost basis due to a realized loss resulted in a net increase of $157.1 million in the total cost basis of the LMM investment portfolio
Completed $149.1 million in total private loan portfolio investments, which after aggregate repayments, return of invested equity capital and a decrease in cost basis due to realized losses resulted in a net increase of $36.6 million in the total cost basis of the private loan investment portfolio
Fully exited investments in KBK Industries, LLC, realizing a gain of $17.3 million, which in addition to the total dividends of $25.1 million received over the life of the equity investment, resulted in annual internal rate of returns and times money invested returns of 127.2% and 62.7 times, respectively, on the equity investment, and 27.7% and 3.5 times, respectively, including all debt and equity investments in the company on a cumulative basis since Main Street's initial investment in 2006
Further enhanced our liquidity position and strengthened our capital structure by (i) adding a new lender relationship and expanding the total commitments under our Corporate Facility by $30.0 million to a total of $1.175 billion and (ii) issuing an additional $200.0 million of the March 2029 Notes (with our Corporate Facility and the March 2029 Notes each as defined in the Liquidity and Capital Resources section below)
In commenting on the Company's operating results for the first quarter of 2026, Dwayne L. Hyzak, Main Street's Chief Executive Officer, stated, "We are pleased with our performance in the first quarter, particularly given the backdrop of significant economic and geopolitical uncertainty, which resulted in distributable net investment income before taxes in line with our expectations and prior guidance. We believe that these results continue to demonstrate the sustainable strength of our overall platform, the benefits of our differentiated and diversified investment strategies and the continued underlying strength and quality of our portfolio companies. Consistent with our experience in prior periods of broad economic uncertainty, we believe that our ability to provide highly flexible and customized financing solutions to lower middle market companies and their owners and management teams, together with our differentiated long-term to permanent holding periods, represents an even more attractive solution to the needs of many lower middle market companies, and we are excited about our prospects for continued near-term growth of our lower middle market investment strategy. Similarly, in our private loan investment strategy, we are seeing an improved lending environment and significant opportunities, which we believe positions us well to capitalize on new private loan investment opportunities and to generate attractive returns on those investments."
Mr. Hyzak continued, "We are pleased to have completed significant investments in our lower middle market investment strategy in the first quarter, following our very strong investment activity in the fourth quarter of 2025, resulting in significant growth of our lower middle market investment portfolio over the last two quarters. Our first quarter results and investment activity, continued attractive investment pipeline and favorable outlook for the second quarter resulted in the declaration of another $0.30 per share supplemental dividend to be paid in June 2026, representing our nineteenth consecutive quarterly supplemental dividend, to go with the 12 increases to our regular monthly dividends declared since the fourth quarter of 2021. Additionally, with the continued support from our long-term lender relationships, and the benefits of our recent follow-on issuance of investment grade notes in March 2026 and private placement issuance of investment grade notes in April 2026, we continue to maintain strong liquidity and a conservative leverage profile, which we believe is important in the current economic environment. We remain confident that our diversified lower middle market and private loan investment strategies, together with the benefits of our asset management business, our cost efficient operating structure and conservative capital structure, will allow us to continue to deliver superior results for our shareholders."
First Quarter 2026 Operating Results
The following table provides a summary of our operating results for the first quarter of 2026:
Three Months Ended March 31,
2026
2025
Change
Change (%)
(dollars in thousands, except per share amounts)
Interest income
$ 105,306
$ 98,017
$ 7,289
7 %
Dividend income
28,196
36,026
(7,830)
(22) %
Fee income
6,604
3,003
3,601
120 %
Total investment income
$ 140,106
$ 137,046
$ 3,060
2 %
Net investment income
$ 84,579
$ 85,897
$ (1,318)
(2) %
Net investment income per share
$ 0.93
$ 0.97
$ (0.04)
(4) %
Distributable net investment income (1)
$ 90,786
$ 90,919
$ (133)
— %
Distributable net investment income per share (1)
$ 1.00
$ 1.02
$ (0.02)
(2) %
Distributable net investment income before taxes (2)
$ 94,050
$ 94,832
$ (782)
(1) %
Distributable net investment income before taxes per share (2)
$ 1.04
$ 1.07
$ (0.03)
(3) %
Net increase in net assets resulting from operations
$ 48,981
$ 116,082
$ (67,101)
(58) %
Net increase in net assets resulting from operations per share
$ 0.54
$ 1.31
$ (0.77)
(59) %
Return on equity - quarter annualized (3)
6.4 %
16.5 %
(10.1) %
(61) %
The $3.1 million increase in total investment income in the first quarter of 2026 from the comparable period of the prior year was principally attributable to (i) a $7.3 million increase in interest income, primarily due to higher average levels of income producing investment portfolio debt investments, partially offset by a decrease in interest rates, primarily resulting from decreases in benchmark index rates on floating rate investment portfolio debt investments, and the negative impact from investment portfolio debt investments on non-accrual status and (ii) a $3.6 million increase in fee income, primarily due to a $2.6 million increase in fee income related to increased investment activity and a $1.0 million increase in fee income from the refinancing and prepayment of investment portfolio debt investments. These increases were partially offset by a $7.8 million decrease in dividend income, primarily due to an $8.0 million decrease in dividend income from our LMM portfolio companies and a $0.7 million decrease in dividend income from our private loan portfolio companies, partially offset by a $0.6 million increase in dividend income from our other portfolio investments. The $3.1 million increase in total investment income in the first quarter of 2026 includes the impact of an increase of $1.7 million in certain income considered less consistent or non-recurring, primarily related to increases of (i) $1.0 million in such fee income and (ii) $0.7 million in such dividend income, in each case when compared to the same period in 2025.
Total cash expenses(4) increased $3.8 million, or 9.1%, to $46.1 million in the first quarter of 2026 from $42.2 million for the same period in 2025. This increase in total cash expenses was principally attributable to (i) a $2.9 million increase in interest expense and (ii) a $0.8 million increase in cash compensation expenses.(4) The increase in interest expense is primarily related to an increase in average borrowings outstanding used to fund a portion of the growth of our investment portfolio, partially offset by (i) a decreased weighted-average interest rate on our Credit Facilities due to decreases in benchmark index rates and decreases to the applicable margin rates resulting from the amendments of our Credit Facilities in April 2025 and (ii) a decreased weighted-average interest rate on our unsecured debt obligations resulting from the repayment in September of 2025 of the $150.0 million of unsecured notes with a maturity date in December of 2025 and the issuance of the August 2028 Notes (as defined in the Liquidity and Capital Resources section below). The increase in cash compensation expenses(4) is primarily related to increases in base compensation rates and other employee compensation related accruals.
Non-cash compensation expenses(4) increased $1.2 million in the first quarter of 2026 from the comparable period of the prior year, primarily driven by a $0.9 million increase in deferred compensation expense.
Our Operating Expenses to Assets Ratio (which includes non-cash compensation expenses(4)) on an annualized basis was 1.3% for the first quarter of 2026, an increase from 1.2% for the first quarter of 2025.
Excise tax expense decreased $1.0 million and NII related federal and state income and other tax expenses increased $0.3 million in the first quarter of 2026 compared to the same period in 2025, resulting in a net decrease in tax expenses included in NII of $0.6 million. The decrease in excise tax is due to a decrease in undistributed taxable income as of March 31, 2026 and the increase in NII related federal and state income and other tax expenses is due to an increase in taxable NII between the relevant periods.
The $1.3 million decrease in NII and the $0.1 million decrease in DNII(1) in the first quarter of 2026 from the comparable period of the prior year were both principally attributable to an increase in total expenses, partially offset by (i) the increase in total investment income and (ii) the decrease in NII related tax expenses, each as discussed above. NII and DNII(1) on a per share basis decreased by $0.04 per share and $0.02 per share, respectively, for the first quarter of 2026 as compared to the first quarter of 2025, to $0.93 per share and $1.00 per share, respectively. These decreases include the impact of a 2.2% increase in the weighted-average shares outstanding compared to the first quarter of 2025, primarily due to shares issued since the beginning of the comparable period of the prior year through our (i) at-the-market ("ATM") equity issuance program, (ii) dividend reinvestment plan and (iii) equity incentive compensation plans. The decrease in NII on a per share basis in the first quarter of 2026 is after a net increase of $0.01 per share resulting from items considered less consistent or non-recurring in nature compared to the first quarter of 2025, including a $0.02 per share increase in such investment income, partially offset by a $0.01 per share increase in deferred compensation expenses, each as discussed above. The decrease in DNII(1) on a per share basis in the first quarter of 2026 is after a $0.02 per share increase in investment income considered less consistent or non-recurring in nature compared to the first quarter of 2025, as discussed above.
The $49.0 million net increase in net assets resulting from operations in the first quarter of 2026 represents a $67.1 million decrease from the first quarter of 2025. This decrease was primarily the result of (i) a $66.3 million decrease in the net fair value change of our portfolio investments resulting from the net impact of net realized gains/losses and net unrealized appreciation/depreciation, with the decrease resulting from a net fair value decrease of $32.6 million in the first quarter of 2026 compared to a net fair value increase of $33.6 million in the prior year and (ii) a $1.3 million decrease in NII as discussed above, with these decreases partially offset by a $0.5 million decrease in net tax provision on the net fair value change of our portfolio investments resulting from a net tax provision of $3.0 million in the first quarter of 2026 compared to a net tax provision of $3.5 million in the comparable period of the prior year. The $32.6 million net fair value decrease in the first quarter of 2026 was the result of net unrealized depreciation (including the reversal of net fair value appreciation recognized in prior periods due to the net realized gain in the quarter) of $50.6 million, partially offset by a net realized gain of $18.0 million. The $33.6 million net fair value increase in the first quarter of 2025 was the result of net unrealized appreciation of $63.2 ...
